FINANCIAL PROVISION FOR PUBLIC EXPENDITURES DURING THE WAR

Abstract

The large-scale aggression of the Russian Federation against Ukraine caused such damage to the financial system that the providing for critical needs was threatened. There was a need to review approaches to the management of public expenditures, as well as their financial provision. During the war, public expenditures increased sharply, while revenues decreased. Such changes required the introduction of fundamentally new approaches to the cost management and resource mobilization performed in compliance with the principles of fiscal sustainability. An analysis of the peculiarities of financial provision for public expenditures in Ukraine during the war and the application of measures to improve it is carried out using such research methods as historical, logical, abstraction, description, generalization, comparison, grouping, analysis and synthesis. The increase in budget deficit is noted that goes far beyond the limits established by the fiscal rules functioning before the war. To cover it, the placement of loans on the domestic market was expanded. Due to the hindered access to the international market, the supply of resources was organized as a part of assistance from foreign partners. Making changes to the management of public finance during the war made it possible to maintain its critical level and financial stability. Public debt obligations were placed mainly for long terms, no sharp increase in their yield. External borrowings were obtained from foreign partners on preferential terms. Measures to improve the financial provision for public expenditures during the war and to overcome the latter’s consequences are determined: reduction of state budget deficit indicators by increasing the coverage of expenditures by revenues; regulation of fiscal rules application during the war; limitation of monetary financing; decrease in the amount of public resources to finance the budget deficit; strengthening control by non-governmental organizations over the use of resources mobilized from all sources for financial provision for public expenditures.